On November 17, 2016, the Third Circuit Court of Appeals issued a highly-anticipated ruling in the chapter 11 reorganization of Energy Future Holdings Corp. ("EFH") invalidating one of the aspects of EFH's confirmed chapter 11 plan. In Del. Tr. Co. v. Energy Future Intermediate Holding Co. LLC, the Third Circuit reversed lower court rulings disallowing the claims of EFH's noteholders for make-whole premiums allegedly due under their indentures.
TerraForm Power Settles Derivative Lawsuit by Increasing Independence
The Judicial Conference Advisory Committee on Bankruptcy Rules has proposed amendments to the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and the Official Bankruptcy Forms and requested that the proposals be circulated to the bench, bar, and public for comment. The proposed amendments, Advisory Committee reports, and other information are posted on the Judiciary’s website.
In Weisfelner v. Hofmann (In re Lyondell Chem. Co.), 2016 BL 241310 (S.D.N.Y. July 27, 2016), the U.S. District Court for the Southern District of New York reversed a 2015 ruling by the bankruptcy court presiding over the chapter 11 case of Lyondell Chemical Company (“Lyondell”) that dismissed claims asserted by a chapter 11 plan litigation trustee seeking to avoid as actual fraudulent transfers $6.3 billion in payments made to the former stockholders of Lyondell in connection with its 2007 leveraged buyout (“LBO”) by Basell AF S.C.A. See Weisfelner v.
Section 350(b) of the Bankruptcy Code permits a bankruptcy court under certain circumstances to reopen a bankruptcy case even after the estate has been fully administered and the case is closed. In In re Atari, 2016 BL 125936 (Bankr. S.D.N.Y. Apr. 20, 2016), the U.S. Bankruptcy Court for the Southern District of New York explored the circumstances under which it may be appropriate to reopen a closed chapter 11 case.
On June 9, 2016, the New York State Court of Appeals, in Ambac Assur. Corp. v. Countrywide Home Loans, 2016 BL 184648 (N.Y. June 9, 2016), reversed a lower court decision, consistent with the overwhelming majority of federal court decisions, that the common interest doctrine under New York law is not limited to communications made in connection with pending or reasonably anticipated litigation.
In Deutsche Bank Trust Co. Ams. v. Large Private Beneficial Owners (In re Tribune Co. Fraudulent Conveyance Litig.), 818 F.3d 98 (2d Cir. 2016), the U.S. Court of Appeals for the Second Circuit held that the “safe harbor” under section 546(e) of the Bankruptcy Code for settlement payments and for payments made in connection with securities contracts preempted claims under state law by creditors to avoid as fraudulent transfers pre-bankruptcy payments made to shareholders in connection with a leveraged buyout (“LBO”) of the debtor.
In FTI Consulting, Inc. v. Merit Management Group, LP, 2016 BL 243677 (7th Cir. July 28, 2016), a three-judge panel of the U.S.
Secured lenders have welcomed a ruling recently handed down by the U.S. Bankruptcy Court for the Southern District of New York in the chapter 11 cases of Aéropostale, Inc. and its affiliates (collectively, "Aéropostale"). In In re Aéropostale, Inc., 2016 BL 279439 (Bankr. S.D.N.Y. Aug. 26, 2016), Bankruptcy Judge Sean H.
On July 26, 2016, a three-judge panel of the U.S. Court of Appeals for the Seventh Circuit ruled that the Bankruptcy Code section 546(e) "safe harbor" applicable to constructive fraudulent transfers that are settlement payments made in connection with securities contracts does not protect "transfers that are simply conducted through financial institutions (or the other entities named in section 546(e)), where the entity is neither the debtor nor the transferee but only the conduit."FTI Consulting, Inc. v. Merit Management Group, LP, 2016 BL 243677.